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Thursday, April 27, 2017

Wave 3 continued faster and further than expected, which is typical for wave 3, but we saw the beginning of a little pullback into wave 4 yesterday.

Until you see a pattern develop you're guessing, but flat to down points to wave 4, often trading into a triangle, and that's what I'm seeing develop on the 1 min chart. This is a consolidation pattern, not something you sell. The only reason we're watching a 1 min chart is to break the monotony, and see what develops, and because the short term charts are working again.

Never sell a dull market applies here, and the next short squeeze is bound to take place going into the Memorial Day weekend, unless we see a (less likely) mad rush for the exits... doubtful. MM's didn't drive the market up like this in order to sell a week later. All I can say is "be patient".

$SPX If the 1 min chart is correct, watch for traders to get shaken out on both sides of the trade today.

$SPX 5 min chart looks even more bullish, but I think this upturned channel is too aggressive. Guess we'll find out today... Key support looks like 2380. If the market breaks out to new all time highs, we'll find resistance at the end of wave 5, and see the $VIX spiking on the reversal. So far we haven't seen anything like that, so you gotta trade the market you have. The $VIX is severely oversold in the short term, and remains pinned. It's not natural, so I think it's rigged, and that could continue... when Bernanke bragged to the congress, that "volatility is down", I knew they were rigging it. Eventually they'll pull the plug on this bull market, but only when they're good and ready.

Upside target looks like 2400+ but could go much higher is this is only wave iii of 3. One the rules you'll find in my free Elliott Wave tutorial is "never under-estimate the power of a wave 3". Easier said than done, but if you're already short with the $VIX pinned, and the trend is still up, you're not trading, you're betting on a hunch (emotions), which are going to be wrong 90% of the time.

If you're following me on Twitter, and you have no experience trading, instead of asking me what I think the next move is, why not try trusting the charts? If you can't read a chart, at least learn the basics. I'm not here to hold traders hands, or on Twitter to chit chat. Well, sometimes... but not usually, and especially not when I'm charting. Try to keep comments and questions to a minimum, or I'll be forced to mute you.

Oil - continues to try to build a base. Last I checked it was retesting the (WTI) $49 level, but as long as it remains off the recent lows I'm very bullish.

$BKX - Financials and Banks are looking toppy, but if the $BKX get's back above the 50 day ma, it's going to hold up for a while longer.

Semiconductors and Tech could lead the way down, so I'd at least be headed with some short positions there. Maybe tech holds up for 3 more weeks, maybe not. I don't predict timelines.

This morning Deutsche Bank $DB is in focus, and looks like it's ready to pull back. If you remember I called the bottom on $DB in late 2016, and I believe that bottom will hold.
$DB

The rest of the targets including the Miners, and the $RUT, I've already tweeted numerous times, but I can only focus on so many things at once.
AA

Monday, April 24, 2017

2. Dow holds key support, as seen on the long term (weekly) chart below.

3. Bullish spinning top candle seen on the same chart.

4. Money has to be put to work, and MM's have been sitting on their hands since March.

5. Contrarian indicators - namely folks on twitter trying to put bearish words in my mouth on a Saturday. Like I said, I never told anyone to sell this market, in fact I called those who sold at the lows, "idiots", and called for a rally to 2369 on Monday (today).

Really, if you're not even going to pay attention... don't talk to me. Even when you see the bears agreeing with me, and re-tweeting my charts, you should place them in the contrarian camp. Probably half of them are betting the other way, anyhow. Trust no one. Trust the charts.

Speaking of contrarians: Lately you've seen me busting on Jim Cramer, after I caught him pushing a negative, "Trump trade" theory, and waving his arms over "geopolitical tensions" - with North Korea, and pumping gold... That's the Fake News talking. That's the networks selling fear porn, in order to shake you out of your trade, and I tweeted out many bullish charts on Friday to prove it. I don't think I have to tell you who owns these networks. Don't buy what they're selling. The $VIX determines whether there is real fear in the market; not the news; not opinions.

Dow weekly chart:

We got a little pullback on OPEX as predicted, and a $VIX rally (to a lower high). No fear.

$SPX - Next resistance is 2370. Support becomes the 50 day ma @ 2357.42.

I still don't like the $RUT, so if you want to hedge against the downside risk, I'd put a short trade on there.

We're not out of the woods until we see the market continue to break out.

Friday, April 21, 2017

Markets continues to chug sideways in a range, but we've done pretty well timing daily moves, right?
Got our pullback on Wed., and a nice snap-back rally on Thursday, but not seeing any follow-through. This pretty much rules out a powerful wave 3, in my mind, because wave 3 waits for no one. For this reason, I've revised the short term EW count to wave 1 (or A) in a leading diagonal triangle, as I tweeted out yesterday afternoon, and seen on the 1 min. chart below. Short term support looks like 2352 - 53. I wouldn't be surprised to see markets remain pinned in a range after yesterdays big move.

OPEX (options expiration) is notoriously unpredictable, and this morning we see most markets pinned; gold up $2.50, Oil flat, Dow up 1 - 12 points (pinned).

There's still a good chance we see a pullback, on higher volatility, so watch the $VIX (our most reliable fear gauge).

$VIX - A breakout back above 14.70 would spook most traders, but resistance is 15.55.

Oil - how long have I been calling for a pullback in oil, yet we didn't see it until traders returned from the long pass-over holiday. I have to admit I got this one wrong, because I got caught up watching the short term $USO chart, and misidentified a wave "a" (bearish) triangle for a wave 4 (bullish) triangle, even though I identified exactly where support was (right where it broke). This is why I always say trading it is half the work. When support breaks you sell, because that's what every other trader is going to do. If you're not prepared, the boat is going to sail without you. Here's where I got it wrong, for those who understand Elliott Wave Theory: $USO looked like it was pulling back into wave "iv" (the triangle pattern seen in purple), and marked "iv" (seen on the chart below), and the reason I labelled it wave "iv", is because wave 3 (what I have marked wave "i" of 3) is not supposed to be the shortest wave (according to EW rules and guidelines). Did wave 5 truncate? I don't know, and this is a good example why I despise short term charts, as well as why I never trust holiday trading, when volume is light, and markets are notoriously unpredictable. Given, it's a 15 min chart, and the $USO may not be the best representation of the $WTI Crude trade, but I don't like missing a 5% move. There, I'm done beating myself up, and making excuses...

Oil - pulls back in what looks like wave 2. The trend (in blue) is still very much up. This Oil fund pretty much tracks $WTI crude just as the $USO does, but keep in mind ETF's are not a perfect representation of the underlying index, a topic for another time.

If Oil goes slightly lower, I'll be re-adjusting my bullish channel, and lowering my green line (as seen on the next chart), so also keep this in mind, Oil Traders.

The Russell 2000 $RUT (and the matching ETF $IYW) - I don't like (the heart of the Risk on/off trade) the Russell , and I have yet to identify the pattern it's trading in.
I'm seeing several possibilities and none of them bullish.

1. On the 5 min chart we see the price action whipsawing in an apparent broadening triangle pattern. Wave D can overshoot, and often doesn't determine the shape of the triangle. I wouldn't chase this, on a dare. Wave E is a panic wave, so there's just too much risk being long here.

2. The 60 min chart shows a contracting sideways triangle - this is actually more bearish (wave B triangle), than the alternative pattern seem in the above chart. I think wave B may continue testing the highs into next week, but if you see the Russell crash into a powerful wave C, key support is 1296 - 1299.

Tuesday, April 18, 2017

Gold, & oil down, financials up 1.5%. Pretty much got it right on all counts.

Not sure what all the buying into yesterday's close was about, but it already looked like the end of wave 1, where I called it a "sell" (at 2343.25). I think the market needs to build a base, before we're off to the races.

SPX - DCS chart. I'd like to see it pullback to the low 2330's, and paint an inverted hanging man doji, or a long legged doji.

$SPX - 120 min chart. I hope we don't end up trading in this range all summer, but that's usually how it goes.

Monday, April 17, 2017

Dow ends down 1% for the week

"Dow ends down 1% for the week", should have been the headline, but what is being reported by the fake news is "markets in turmoil". Don't believe the hype.

While everyone else was wringing their hands over a 1% pullback, we caught a nice rally in Biotech. That can continue, and especially if a new healthcare bill is revealed.

The Dow did sell below the 50 day last week, so that becomes widely accepted resistance...

Many players are still on vacation, and passover doesn't end until sundown, on Tuesday. That sets up for a powerful rally into OPEX Friday, or at least back to the top of the range.

DOW chart changed slightly, but is still trading in a range. Support is the previous low around 20,400. Futures are down, but set to open in the green, so we're not seeing any follow-through from Friday's panicky close. Many markets are still closed.

SPX also trading in a range in what looks like a sideways contracting triangle.

Still looking for a pullback in oil, and gold, and that brings me the - self explanatory - dollar chart.

$USD (AKA the $DXY). Seeing Dollar strength this morning.

Biotech broke out of it's down-turned (bullish) triangle, but trades into a bearish H&S pattern @ 69.90 on the $XBI. On a pullback the (previous) top triangle line, becomes support.

Financials consolidated into wave B, so watch for financials to lead a powerful snap-back rally.

Wednesday, April 12, 2017

Dow ends down 5 points

Seeing lot's of bearishness in the news, but not much selling.

After yesterday's close, I accidentally caught the pied piper of CNBC (Jim Cramer) telling his people that the gold is a hedge against "geopolitical turmoil", as he continues to pump gold miner Rand Gold, or was it Harmony Gold? This is much to do about nothing.

First let's look at Wed's market gainer Newmont, and the long term trend in purple,

Rand Gold

#DOW continues to trade in a range. Same bullish consolidation in wave 4, we've been watching for weeks. Didn't I say, wave 4's are difficult to predict?

Monday, April 10, 2017

The Market's Last Hurrah

Spent some time studying the short term charts after Friday's close, found the Dow and the $SPX trading into what looks like a megaphone top (AKA a broadening rising expanding triangle), which points to wave 5. This would mark the end of the rally of the past several years, and set up for a major correction, or worse.

DOW - see the pattern in blue.

$SPX 5 min chart - same pattern

Consolidating in the bottom of the range. Note: Wave 4 price action is allowed to interfere (overlap) with wave 1 action, in this type of pattern, but wave 4 should not fall below wave 2 (2344.73 is key support). New all time highs possible before the end of the month. We still haven't seen money put to work in April.

$SOX support looks like 997 and probably headed for new highs.

Gold failed to hold the new high, so I'm still calling it wave "a".

Oil looks like it wants to pull back suddenly, but still remains in an uptrend. 10% shakeout possible

Thursday, April 6, 2017

Notoriously unpredictable Holiday trading

The reason in part is that short sellers typically reduce their risk, before they go away. Another reason is that it's easy to manipulated a dull market. This is all the bulls got, when the Fed is seen raising rates in a slowing economy. Rigged.

$VIX broke above support at my pink line, but now we see it being hammered at 13. Rigged imo
No donations, no VIX chart.

Didn't I say, "don't trade for a week or 2", and this market sucks, as predicted.

Let's go to the charts:

$NATGAS touched resistance at 3.37, and sold off. Support remains 3.11.

$Oil tried to break out before giving back all it's gains. See a bullish channel (in blue) developing.

Gold ended flat

Miners fail to break out.

$NDX I suggested selling the NDX, which rallied higher, before finally giving it all back. Now you see it pinned below my purple line, so was I wrong? I don't know.

Dow - this chart worked, but I wasn't watching the action yesterday.

Let's look at some tech stocks, since the bulls are in love with the sector.

$FB made a new high, barely

$SNAP pulled back to support. Might find a big fat rally there, in the dash for trash.

We saw amazon pumped and dumped. I'd stay away from this one, and the rest of this market, but don't expect it to crash below my blue line just yet. Rigged

Tesla down 3% hehe

$SOX pulls back in an unpredictable pattern

McDonalds $MCD - Bullish leader. Can't believe what it costs for breakfast, for 2 people.... The consumer is hurting.

Tuesday, April 4, 2017

The 1 min chart we were watching on Friday broke down on Monday, but the market continues to rally off the 50 day ma. Looks like the crooks on Wall Street are keeping their ammo dry for the holidays again; Setting a bear trap ahead of the holiday

$SPX key support is the recent low @ 2322.25, and again at the 50 day @ 2341. Resistance is just above the previous high around 2272

Gold remains pinned below 1266. We know the banksters manipulated gold markets last year, and I believe that skewed the gold chart. I don't believe Gold uncoupled from Silver (see the EWC on Silver below).

There's a good chance Silver crashes when $18 support breaks again.

Oil is pulling back into wave 2. Trend on the 60 min chart broke yesterday. May find a short trade there.

$NatGas support is 3.10/ resistance is 3.37 - in a bearish H&S pattern on a nine month chart.

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About Me

I use a hybrid blend of technical indicators; cyclicality, sentiment, chart patterns, and more, to analyze the current market environment and provide short and long term outlook. It was never my intention to become a market timer, let alone try to make a living at it! It just came naturally. In 2010 I became a Hall of Fame Author at stochcharts.com after calling the flash crash, the subsequent rebound, and the eventual bottoming of the market in July of that same year. I drew quite a following, and needed more room to write, so I started this blog. Someone suggested I add a PayPal button, and the rest is history. This has all been a great learning experience, and I am very grateful for the opportunity. Please follow me on Twitter for the latest charts and my continuing up to the minute market outlook.